Int: +61 2 9904 4722
You are here
Home ›Property investors warned to avoid competing against emotional first home buyers
Property investors warned to avoid competing against emotional first home buyers
In a wise move the NSW Government is tightening up the stamp duty exemptions - after all the savings are essentially passed on to vendors though increased sale prices rather than helping out the buyer. Come December 31 and exemptions and subsidies for first home buyers on existing homes under $600,000 come to an end.
With just over seven weeks to go until the deadline, first home buyers are likely to come out of the woodwork as they try to beat the cut-off and save a little cash. Investors would be wise to tread cautiously in this climate to ensure they don’t get caught up in an emotional bidding war.
Home buyers will typically pay more than an investor, and new home buyers who have a deadline to beat could inadvertently pay a premium for existing properties in a bid to save money on stamp duty costs. Unfortunately, when incentive schemes are in place many buyers see the money they are saving but forget to evaluate whether the current prices will be sustainable when the incentive comes to an end
As the demand increases, so will prices and this could have a knock-on effect. Those wishing to buy in the next price bracket from $600,000 up to a million dollars also need to be cautious as many sellers of sub $600k properties look to upgrade.